Energy Policy

23rd November 2017

Government accused of ‘turning their back on renewables’ after saying there will be no more money for new low-carbon levies. Companies hoping to build new windfarms, solar plants and tidal lagoons, have been dealt a blow after the government said there would be no new subsidies for clean power projects until 2025 at the earliest. The Treasury said it had taken the decision to “protect” consumers, because households and businesses were facing an annual cost of about £9bn on their energy bills to pay for wind, solar and nuclear subsidies to which it had already committed. The revelation that there will be no more money for projects before 2025 could dash hopes for pioneering projects such as the proposed £1.3bn tidal lagoon in Swansea, which has a mooted launch date of 2022. In a Treasury document on carbon levies published on Wednesday, officials said: “On the basis of the current forecast, there will be no new low-carbon electricity levies until 2025.” Environmental groups criticised the Treasury move. The WWF said it was a huge disappointment, while Greenpeace claimed Wednesday’s budget was one of the least green ever. The government also announced that until 2025 it was freezing a carbon tax on dirty energy generators. Big energy firms, including SSE, have been calling for the tax, the carbon price floor, to be strengthened to encourage new investment in greener energy. Recent research by energy analysts suggested that without an increase in the tax, coal power plant owners would enjoy a last hurrah in the early 2020s before they hit a government deadline for the closure of all coal-fired stations by 2025. One expert said the decision to freeze rather than increase the tax meant the UK’s climate change target for 2030 was being put at risk.

While the government received a degree of praise for its air and plastic pollution announcements, campaigners were quick to criticise its overall environmental benefit. ‘Least green budget’ “This was one of the least green budgets ever, because there will be no new money for renewables until at least 2025. This is the deat h knell for new renewable energy like tidal, wave and geothermal technology despite the huge economic opportunities they could bring,” said Mr Sauven. WWF head of energy and climate, Gareth Redmond-King, said: “This Budget shows confusion at the heart of the UK Government,” he said. Whilst support for electric vehicles and promising to tackle the scourge of single use plastics is very much to be welcomed, other measures point in the opposite direction. “Most striking is the lack of any new money for renewables until 2025 whilst giving fossil fuels an easy ride by slashing taxes for North Sea Oil and Gas. This Budget misses the mark and does not secure the future of our planet that the Chancellor sets out to do,” he added.

Britain’s renewable energy industry expressed “deep concern” on Wednesday over a document published alongside the Budget that suggested there will be no new subsidies for low-carbon electricity generation for another eight years. The UK Treasury published a new framework designed to limit the “green taxes”, or levies, that are added to consumer energy bills and pay for subsidy schemes that support low-carbon electricity generation, such as wind farms and solar. The document said there should be no new low-carbon electricity levies “until the burden of such costs is falling”. According to the government’s forecasts, the burden is not expected to decrease until 2025. Under the framework, existing contracts will still stand and a £557m pot of funding announced last month to support “less established” renewable technologies, including offshore wind, will be honoured. But supporters of green energy suggested the announcement could stymie the development of other emerging technologies while solar and onshore wind projects would have to be funded in the near-term without any burden to the public purse.

Philip Hammond, the UK’s chancellor, has delivered his second budget this year in a speech to parliament high on post-Brexit optimism and green rhetoric. Carbon Brief looks at the climate and energy announcements.

The aspirations of the Clean Growth Strategy have been praised as a “step in the right direction” by green economy experts, but concerns have been raised that the Government’s willingness to rely on banking and borrowing from carbon budgets could put the goals of the Paris Agreement at risk. The BEIS Committee called on the Committee on Climate Change’s (CCC) chair of the adaptation sub-committee Baroness Brown to provide her thoughts on the strategy. Although the CCC won’t publish a detailed response to the strategy until January 2018, Baroness Brown noted that the plan suffered from a lack of clarity. “I welcome the positive tone of the Clean Growth Strategy and it is a step in the right direction,” Baroness Brown said. “It’s good to see climate change addressed in a way of economic growth. It still needs quite a lot of clarification and firming up. “There a quite a lot of aspirations in some areas that are not yet policy and there are a number of times where it says things will be done where ‘practicable, cost-effective and affordable’. It’s difficult to say how much of this is actually going to happen.”

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